Financial Procedures / The Accounts of Canada

Public Accounts of Canada: Officers of Parliament; funds spent without the authorization of Parliament

October 24, 2003

Debates, pp. 8723-4

On October 2, 2003, John Williams (St. Albert) rose on a point of order regarding certain funds identified by the Auditor General which had reportedly been spent by the Office of the Privacy Commissioner for the fiscal year 2002-03 without the authorization of Parliament.^[1] Mr. Williams cited a report of the Auditor General to the effect that despite the requirement for organizations in the federal Government to make financial statements that are complete, accurate and fair, the Office of the Privacy Commissioner had failed to do so. He asked how this overspending could have occurred, since the Financial Administration Act prohibits any payments to be made out of the Consolidated Revenue Fund without the authorization of Parliament. Mr. Williams argued that the Government would have to solve the problem of obtaining Parliament’s approval for funds that were spent in 2002-03. On October 6, 2003, Don Boudria (Leader of the Government in the House of Commons) rose in response to Mr. Williams’ point of order. He declared that the overspending in question would be corrected by the Government through a clear authorization process set out in the Financial Administration Act and Treasury Board policies. The Speaker took the matter under advisement.^[2]

On October 24, 2003, the Speaker delivered his ruling. He affirmed that his role in the matter was limited to determining whether the rules and practices of the House had been infringed. He stated that he could find no evidence of a direct attempt to mislead Members, noting that Mr. Boudria had assured the House that the item would be correctly set out in the Public Accounts to be tabled later that year. He noted with dismay that Members had once again found it difficult to obtain the information they required from the estimates documents. However, he concluded that no breach of the House’s rules had occurred.

Decision of the Chair

The Speaker: I am now prepared to rule on the point of order raised on October 2, 2003, by the hon. Member for St. Albert, concerning his claim that the Office of the Privacy Commissioner had overspent funds appropriated by the House. I would like to thank the hon. Member for St. Albert for raising this issue, as well as the hon. Government House Leader for his comments.

In support of his charge, the hon. Member for St. Albert cited the Auditor General’s “Report on the Office of the Privacy Commissioner of Canada”. The Report notes that despite the requirement for organizations in the federal Government to make financial statements that are complete, accurate and fair, the Office of the Privacy Commissioner had failed to do so.

Paragraph 111 of the Report states:

We found that despite these requirements, the preparers of the Office of the Privacy Commissioner’s financial statements for the fiscal year ending 31 March 2003—the Director, Financial Services, the Chief of Staff, and the Executive Director—knowingly omitted about $234,000 of accounts payable at year end.

The Report concludes in paragraph 112 that:

The effect of the omission was to mislead Parliament by creating the impression that the Office of the Privacy Commissioner had spent only the amounts authorized by Parliament for the 2002-03 fiscal year.

On October 2, the hon. Government House Leader indicated that he would endeavour to verify that information communicated to the House had been accurate. On October 6, the hon. Minister returned to the House to clarify the procedure the Government uses in cases such as this. In his remarks, the hon. Government House Leader pointed out that the procedure for dealing with the overspending of an appropriation is well established both in Treasury Board guidelines and in the Financial Administration Act.

Subsection 37.1(4) of the Financial Administration Act states:

Where… a payment is made that results in an expenditure that is in excess of an appropriation, (a) the amount by which the expenditure exceeds the balance then remaining in the appropriation constitutes a first charge against the next appropriation of the immediately subsequent fiscal year;

The hon. Government House Leader stated:

Therefore, the $234,000 will be recorded in the Public Accounts for 2002-03 since that is the year in which the expenses were incurred.

This will result in reporting in the Public Accounts 2002-03 an over expenditure on that vote, in this case Vote 45 of the Office of the Privacy Commissioner, by approximately $234,000—

As hon. Members are aware, funds requested in the estimates must be approved by Parliament. The Government can only spend funds in the amount that Parliament has appropriated and only for the purpose for which the funds are appropriated. With respect to the oversight of Government expenditure, House of Commons Procedure and Practice at page 698 states:

First, Parliament must assent to all legislative measures which implement public policy and the House of Commons authorizes both the amounts and objects or destination of all public expenditures. Second, through its review of the annual departmental performance reports, the Public Accounts and the reports of the Auditor General, the House ascertains that no expenditure was made other than those it had authorized.

Both the hon. Member for St. Albert and the hon. Government House Leader agree that the Office of the Privacy Commissioner overspent the appropriation in Vote 45 for 2002-03 by some $234,000. That point is not disputed.

The hon. Member for St. Albert contends that this will pose difficulties for the President of the Treasury Board. The Government House Leader counters that the situation will be dealt with in due course when the Public Accounts for 2002-03 are published in accordance with existing Treasury Board guidelines and the provisions of the Financial Administration Act.

As hon. Members know, the role of the Speaker is a restricted one. House of Commons Procedure and Practice, p. 261, states:

Despite the considerable authority the Speaker holds, he or she may exercise only those powers conferred by the House, within the limits established by the House itself. In ruling on matters of procedure, the Speaker adheres strictly to this principle—

The question that I must address as Speaker is whether the rules or practices of the House have been infringed in any way. The timing of this complaint is somewhat problematic for the Chair since it anticipates potential difficulties. Thus, for example, the Auditor General has suggested that the House will be misled while the Government House Leader has assured the House that the item in question will be correctly set out in the Public Accounts. Even the hon. Member for St. Albert seemed satisfied that the Interim Privacy Commissioner is taking the necessary steps to ensure that this will be so.

On June 12, 2003, as part of its approval of the Main Estimates for 2003-04, the House granted the Office of the Privacy Commissioner $9.8 million as the appropriation for Vote 45. Members will no doubt want to inquire as to whether the $234,000 has been charged against that appropriation, as required by the Financial Administration Act.

While the Chair can find no evidence of a direct attempt to mislead hon. Members, I find it regrettable that once again Members have found it difficult to obtain the information they require from the estimates documents. Although the over expenditure will be set out in the Public Accounts for 2002-03, those Public Accounts are usually not available to hon. Members when they consider the main estimates for the subsequent year. I know that many Members would find it useful to be informed of cases such as this before they have completed their consideration of the main estimates.

I congratulate the hon. Member for St. Albert for his continued vigilance in these matters, which is a credit both to him and to the House. At the present time, however, I can find no grounds on which to find that any breach of our rules has occurred.